1. Organizing the structure of the company means deciding how many jobs need to be done
and who is responsible for doing them.
2. In a capitalist economy, organizations seldom reorganize due to changing markets.
3. One key to organizational success is to go back to basic principles and build the business
on a sound foundation.
4. Small business organizations lack the size required to reap the benefits of labor
specialization.
5. The purpose of a division of labor and specialization is to improve an employee’s job
performance.
6. Managing a growing business often requires managers to create departments to
accomplish various tasks.
7. The process of creating individual departments to do specialized tasks is called
departmentalization.
8. Division of labor refers to deciding how many jobs must be accomplished and then
dividing them up amongst the labor force.
9. The success of the firm often depends on assigning the right tasks to the right person.
10. The process of setting up individual departments to do specialized tasks is called job
specialization.
11. Correctly structuring a business organization allows managers to avoid delegating
responsibility and authority to employees.
12. Division of labor is difficult to achieve in small businesses.
13. Departments are functional units within the business such as sales, accounting, finance,
and marketing.
14. As indicated in the
Making Ethical Decisions
box, “Would You Sacrifice Safety for Profit?”
organizational decisions that affect profits in a negative way should be avoided at all cost.
15. In its effort to reorganize its floor space, Backstreet Books decided to eliminate seating
space in its stores in order to make room for bookshelves to accommodate the growing interest
in books about how to
go green
. This company’s effort is an example of how a firm may reduce
its emphasis in one product line in order to serve customer preferences and trends.
16. To better organize his landscaping business, Frank divides each job into several parts.
One part is excavation and removal of old landscaping, the next part is design, followed by
purchasing, and the last part is installation of new plants. If he assigns a different employee to
each part, this action would be an example of departmentalization.
17. Alicia dreams of opening her own restaurant and knows that she will need to organize her
business. Organizing begins with determining the work to be done.
18. When Eric Schmidt joined Google he tackled the organization function head-on. In
speaking at a large conference with its founders, Sergey Brin and Larry Page, he commented that
Google was running pretty well but “it just needed a little structure.” Schmidt was referring to
basic organization principles such as division of labor, specialization, and getting the
departments running smoothly.
19. The driving force behind the change in business organizations is the change in consumer
expectations.
20. Henri Fayol and Max Weber are best known for their contributions to accounting theory.
21. Fayol’s principle of the division of labor says that functions should be divided into areas of
specialization such as production, marketing, and finance.
22. One of Fayol’s principles suggests that managers should have the right to give orders and
expect others to follow.
23. Fayol’s principle of esprit de corps says that employees should be divided into small
groups that can be directed efficiently by a single manager.
24. Fayol’s principles suggest that the goals of the firm are less important than the goals of
individual workers.
25. According to Fayol’s principle of
authority
, if you have authority you also have
responsibility.
26. Fayol believed that the amount of decision-making power vested in top management
should be the same in all situations.
27. Fayol believed that managers should treat employees and peers with respect and justice.
28. Clear communication among workers and keeping order in materials and people are
included in Fayol’s principles.
29. Max Weber’s principles of organization were similar to those of Henri Fayol.
30. Weber believed that large organizations required everyone to follow the established rules
and guidelines precisely.
31. Weber was critical of bureaucrats because he felt they undermined the efficiency of the
organization.
32. Weber had a great deal of faith in managers. He was confident that a firm would do well if
employees simply did as they were told.
33. Weber promoted the idea of the pyramid-shaped organization structure for large
businesses.
34. Max Weber’s organizational theories require an educated workforce to operate efficiently.
35. Weber was a strong proponent of bureaucracy.
36. Some business organizations still follow the 1940s organizational theory of Max Weber.
37. Weber believed that employees should be empowered to make their own decisions.
38. Job descriptions are an important part of Max Weber’s organizational theory.
39. Max Weber believed that promotion should be based solely on seniority.
40. The design of a bureaucratic organization assumes a well-educated workforce.
41. An organizational hierarchy establishes one person at the top of an organization.
42. A chain of command is a line of authority that moves from the lowest level of the hierarchy
to the top.
43. A hierarchy requires many top managers, but only a few middle managers.
44. According to Weber, a bureaucrat is a middle manager whose job is to implement top
management’s orders.
45. A bureaucracy empowers employees to quickly respond to customers’ wants and desires.
46. A bureaucracy is an organization with many layers of managers who set rules and
regulations and oversee all decisions.
47. Bureaucratic organizations establish rules and regulations that everyone is expected to
follow.
48. Bureaucratic organizations are not very responsive to customers.
49. A bureaucracy is designed to be customer focused.
50. Bureaucratic organizations are structured to empower employees and please customers.
51. A bureaucratic style of organization is slow when responding to change.
52. Empowerment works only when employees are given the proper training and resources to
respond.
53. The basic idea behind the organization design of Fayol and Weber was that management
wanted to
control
workers.
54. An organization chart shows who is accountable for the completion of specific work and
who reports to whom.
55. Looking at a traditional organization chart, you will view who reports to whom; you will
have a sense of each person’s authority and responsibility, and the type of work that they
perform for the organization.
56. As organizations grew, the use of Fayol’s principles led to rigid organizations that didn’t
always respond quickly to consumer requests.
57. In today’s fast-paced business environment, Weber’s bureaucratic ideas work well. These
principles permit business to respond quickly to customer changes.
58. When we experience
economies of scale,
this means that as production levels rise (we
make more of something), the cost of supplies and the cost of labor that go into the production
go down.